PM warns EU to get real over budget

David Cameron has warned Europe it must live in the "real world", after talks over a long-term budget to fund the EU collapsed.

The Prime Minister, fighting for austerity-style cuts, said the offer on the table was "just not good enough". And he hit out at eurocrats for failing to come up with even a "single euro" in savings from their own pay and perks regime.

The EU's leaders abandoned their talks on the second day in Brussels when it became clear that the gaps between national demands over spending priorities were too wide.

Mr Cameron was far from isolated in seeking "at worst a freeze, at best a cut" in the EU's spending levels for 2014-2020.

As the talks began on Thursday, the leaders were looking at a seven-year budget "envelope" of 940 billion euro (£756 billion) for 2014-2020 - a reduction of 60 billion euro (£48 billion) in what the European Commission wanted. It was also nearly five billion euro (£3.8 billion) lower than the budget ceiling in the previous 2007-2013 seven-year spending deal.

But Downing Street said that previous ceiling was never reached, so the "cut" is in real terms, not a saving. Mr Cameron wanted to see another 25 billion euro or more shaved off the total, but a revised compromise last night kept the same total but shuffled spending figures around within it.

Rebuffed on the size of the budget, unable to win even symbolic reduction in eurocrats' salaries and pensions, and still facing a threat to the UK's rebate from proposed changes, Mr Cameron joined German Chancellor Angela Merkel in preferring to call time on the talks rather than sit in Brussels all weekend getting nowhere.

Others agreed, although poorer central European countries benefiting most from a bigger budget were prepared to stay on, judging that a postponement will almost certainly mean a budget adjustment downwards when the talks resume.

Asked about France defending higher agriculture subsidies - the farm vote is crucial in France - Mr Cameron said: "I don't think it is particularly helpful to point the finger of blame at countries coming here to defend their national interests. One of the problems has been: who is here to stand up for taxpayers? Which institution is there to say: where's the money coming from? Who is going to pay for it?"

He insisted the UK was being listened to, and he rejected Labour claims that he was isolated in Europe. He said: "Any attempts there might have been to put Britain in a box and do a deal without them didn't work."